Discussion paper

DP15186 The Heterogeneous Effects of Trade across Occupations: A Test of the Stolper-Samuelson Theorem

This paper develops and implements a novel test of the Stolper-Samuelson theorem. We
use nationally-representative matched employer-employee panel data from 1997 through
2015 to study the effect of the rise in China’s exports on French worker earnings. Our version of the Stolper-Samuelson theorem states that there is a negative correlation between
occupation exposure to Chinese competition and change in worker earnings. First, we document substantial heterogeneity in trade adjustment across occupations. Then, consistent
with the Stolper-Samuelson prediction, we show that workers initially employed in occupations more intensively used in hard-hit industries experience larger declines in earnings.
We also show that workers tend to move out of hard-hit industries, but they tend to remain
in their initial occupation

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Citation

Basco, S, M Liegey, M Mestieri and G Smagghue (2020), ‘DP15186 The Heterogeneous Effects of Trade across Occupations: A Test of the Stolper-Samuelson Theorem‘, CEPR Discussion Paper No. 15186. CEPR Press, Paris & London. https://cepr.org/publications/dp15186